Domestic UK energy bills could rise by 60% by 2016 in a worst-case scenario identified by the energy regulator. However, most other estimates outlined in the Ofgem report would see prices rise between 14% and 25% above inflation by 2020.

The review also said that up to £200bn of investment was needed to secure supplies and to meet carbon targets. Volatile gas markets and power stations nearing the end of their use were the chief concerns, the regulator said.